Correlation Between Citigroup and Fidelity LongShort
Can any of the company-specific risk be diversified away by investing in both Citigroup and Fidelity LongShort at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Fidelity LongShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Fidelity LongShort Alternative, you can compare the effects of market volatilities on Citigroup and Fidelity LongShort and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Fidelity LongShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Fidelity LongShort.
Diversification Opportunities for Citigroup and Fidelity LongShort
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citigroup and Fidelity is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Fidelity LongShort Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity LongShort and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Fidelity LongShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity LongShort has no effect on the direction of Citigroup i.e., Citigroup and Fidelity LongShort go up and down completely randomly.
Pair Corralation between Citigroup and Fidelity LongShort
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.81 times more return on investment than Fidelity LongShort. However, Citigroup is 3.81 times more volatile than Fidelity LongShort Alternative. It trades about 0.16 of its potential returns per unit of risk. Fidelity LongShort Alternative is currently generating about 0.23 per unit of risk. If you would invest 6,083 in Citigroup on August 25, 2024 and sell it today you would earn a total of 901.00 from holding Citigroup or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.78% |
| Values | Daily Returns |
Citigroup vs. Fidelity LongShort Alternative
Performance |
| Timeline |
| Citigroup |
| Fidelity LongShort |
Citigroup and Fidelity LongShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Fidelity LongShort
The main advantage of trading using opposite Citigroup and Fidelity LongShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Fidelity LongShort can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fidelity LongShort will offset losses from the drop in Fidelity LongShort's long position.| Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Bank of Montreal |
| Fidelity LongShort vs. Fidelity Global Value | Fidelity LongShort vs. Fidelity Momentum ETF | Fidelity LongShort vs. Fidelity Canadian High | Fidelity LongShort vs. Fidelity All in One Balanced |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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